A Model for Predicting Inactivity in the European Banking Sector

International Journal of Business and Economic Sciences Applied Research, 8(1): 137-154 (2015)

18 Pages Posted: 22 Oct 2015

See all articles by Themistokles G. Lazarides

Themistokles G. Lazarides

Technological Educational Institute of Western Macedonia

Date Written: August 21, 2015

Abstract

Purpose – The paper will addresses the issue of inactivity and will try to detect its causes using econometric models. The Banking sector of Europe has been under transformation or restructuring for almost half a century.

Design/methodology/approach – Probit models and descriptive statistics have been used to create a system that predicts inactivity. The data was collected from Bankscope.

Findings – The results of the econometric models show that from the six groups of indicators, four have been found to be statistically important (performance, size, ownership, corporate governance). These findings are consistent with the theory.

Research limitations/implications – The limitation is that Bankscope does not provide any longitudinal data regarding ownership, management structure and there are some many missing values before 2007 for some of the financial ratios and data.

Originality/value – The paper's value and innovation is that it has given a systemic approach to find indicators of inactivity.

Keywords: Banks, Europe, Inactivity

JEL Classification: G15, G32, G33

Suggested Citation

Lazarides, Themistokles G., A Model for Predicting Inactivity in the European Banking Sector (August 21, 2015). International Journal of Business and Economic Sciences Applied Research, 8(1): 137-154 (2015), Available at SSRN: https://ssrn.com/abstract=2677148

Themistokles G. Lazarides (Contact Author)

Technological Educational Institute of Western Macedonia ( email )

Larisa, Greece
Larisa, 41110
Greece
00302410684323 (Phone)

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